Posted by Meical on March 30, 2018
I read a great article on the Daily Fintech by Stephen Goldstein
talking about the relationship between Insuretech and Insurance
companies and the impediments to a culture of innovation. In essence,
Insurance can gain competitive advantage by providing a service that
is more and more tailored to customer experience.
The real impediment to furthering innovation in the industry is a
strong aversion to risk taking, a strategy that can be easily
validated when we consider the perils of charting risky territories
such as the LMX reinsurance spiral of the 1980s.
I wanted to reflect on how this might affect more traditional software
offerings in Insurance concerned with Policy Administration and Claims
Underwriting. I feel that in this part of the market, there will be
increasing convergeance with insurers settling for systems which
strike a balanace between configurability and out of the box readiness
to be deployed.
In the short-to-medium term, these platforms will not be disrupted
because the cost and time investment in replacing them will be too
great. Consequently, Insuretech innovation will have to be at the
periphery of these systems. For insuretech start-ups to succeed, it
will be crucial for them to integrate with the policy administration
and claims handling systems of today.